The Impact of Behavioral and Structural Remedies on Electricity Prices: The Case of the England and Wales Electricity Market

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F68407700%3A21230%2F18%3A00327557" target="_blank" >RIV/68407700:21230/18:00327557 - isvavai.cz</a>

Výsledek na webu

<a href="https://www.mdpi.com/1996-1073/11/12/3420" target="_blank" >https://www.mdpi.com/1996-1073/11/12/3420</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.3390/en11123420" target="_blank" >10.3390/en11123420</a>

Jazyk výsledku

angličtina

Název v původním jazyce

The Impact of Behavioral and Structural Remedies on Electricity Prices: The Case of the England and Wales Electricity Market

Popis výsledku v původním jazyce

During the liberalization process the UK regulatory authority introduced a behavioral remedy (through price-cap regulation) and structural remedy (through divestment series) in order to mitigate an exercise of market power and lower the influence of incumbent producers on wholesale electricity prices. We study the impact of these remedies on the dynamics of the wholesale electricity price during the peak-demand period over trading days. An extended autoregressive and autoregressive conditional heteroscedasticity (AR–ARCH) model with a novel skew generalized error distribution is used. This distribution allows one to capture the features of asymmetry, excess kurtosis, and heavy tails. The model is extended to include individual incumbent producers’ market shares and other explanatory variables reflecting seasonal patterns and regulatory regimes. We find that the structural remedy was more successful than the behavioral remedy because the effect of market share of the previously larger incumbent producer on the wholesale price is statistically insignificant. Moreover, after the second series of divestments, price volatility reduced.

Název v anglickém jazyce

The Impact of Behavioral and Structural Remedies on Electricity Prices: The Case of the England and Wales Electricity Market

Popis výsledku anglicky

During the liberalization process the UK regulatory authority introduced a behavioral remedy (through price-cap regulation) and structural remedy (through divestment series) in order to mitigate an exercise of market power and lower the influence of incumbent producers on wholesale electricity prices. We study the impact of these remedies on the dynamics of the wholesale electricity price during the peak-demand period over trading days. An extended autoregressive and autoregressive conditional heteroscedasticity (AR–ARCH) model with a novel skew generalized error distribution is used. This distribution allows one to capture the features of asymmetry, excess kurtosis, and heavy tails. The model is extended to include individual incumbent producers’ market shares and other explanatory variables reflecting seasonal patterns and regulatory regimes. We find that the structural remedy was more successful than the behavioral remedy because the effect of market share of the previously larger incumbent producer on the wholesale price is statistically insignificant. Moreover, after the second series of divestments, price volatility reduced.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50202 - Applied Economics, Econometrics

Projekt

—

Návaznosti

V - Vyzkumna aktivita podporovana z jinych verejnych zdroju

Rok uplatnění

2018

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

ENERGIES

ISSN

1996-1073

e-ISSN

—

Svazek periodika

11

Číslo periodika v rámci svazku

12

Stát vydavatele periodika

CH - Švýcarská konfederace

Počet stran výsledku

24

Strana od-do

—

Kód UT WoS článku

000455358300181

EID výsledku v databázi Scopus

2-s2.0-85059252387